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Time for a Change for Brazil’s Ag Sector

While Brazilian agribusiness may not have had its best ever performance in 2016 (due to climate issues in the main producing regions, price devaluation of commodities, and problems taking out rural credit), it made a major political stride with the creation of the Agro+ Plan.

Launched in August by Blairo Maggi, minister of agriculture, livestock, and supply (MAPA), and by Eumar Novacki, the executive secretary of the plan, the initiative was created with the objective of improving regulatory processes and technical rules to make Brazil more competitive and increase its presence in the international market.

The goal outlined is clear: Ensure that, by 2020, Brazil increases its share in world agriculture trade from the current 7% to 10%. Specialists calculate that as a result, over $30 billion will be injected into the Brazilian economy. “The aim is to take inefficient money and put it to more efficient use,” stated Maggi. “These actions will generate more jobs and income for Brazil.”

In order to speed up the process of modernizing agribusiness, the Ministry formed a partnership with the Parliamentary Coalition for Bureaucracy Reduction of the House of Deputies and with the National Council of State Secretariats of Agriculture. The aim of this agreement is to minimize the annual cost of bureaucracy for Brazil, calculated at R$ 46.3 billion, i.e., 25% of gross domestic product (GNP). “This partnership represents another important step in the evolution and consolidation of the project,” affirmed Ricardo Cavalcanti, head of the Agro+ Plan.

THE PROJECT

With the slogan “We want a simpler Brazil for producers and a stronger one to compete,” the plan was devised based on 315 requests for change submitted to MAPA and through consultation with 88 entities from the productive sector. According to Cavalcanti, through technical meetings, seminars, and workshops with entities representing the production sector, the needs and deficiencies of Brazilian agribusiness were diagnosed. “We already have over 350 requests for change, but the idea is to keep this channel open and carry on gathering the needs of the whole sector.”

In practice, what will producers gain from these measures? According to Cavalcanti, the production chain will be less burdened in some aspects and there will be a reduction in the so-called “Brazil cost.” This will translate to lower production costs for producers in the future. “By meeting these requests, we will see a cost reduction of R$1 billion per year in the production chain and producers will benefit directly,” stated the coordinator of the plan.

One of the key measures is the discontinuation of port reinspections of shipments from units bearing the Federal Inspection Service seal (SIF). Reinspection leads to delays, with containers left standing for up to 10 days at ports. Another request for change by the sector addressed was the introduction of the labels system for products of animal origin (meat, honey, eggs, fish, and derivatives) which now provides clearance of labeling of 90% of products bearing the SIF seal. This means that any amendments to labels, composition, or manufacture of food items are no longer subject to analysis by the Ministry of Agriculture. Companies need only notify the ministry of the change in question.

A practical example of how the plan will help producers cut costs is the change in freezing temperature of pork. The meat may now be stored at 12ºC. as opposed to -18ºC. “This is a practical example of cost reduction. Brazil had higher energy costs using 6°C. lower than the rest of the world,” affirmed Cavalcanti.

Besides these measures, Agro+ also includes review of phyto-sanitary certification rules and the acceptance of digital reports also in Spanish and English. “Our laws on plant health are really dated, and it was high time to update them,” said the coordinator.

CUTTING STATE BUREAUCRACY

After the launch of Agro+ by the MAPA, Rio Grande do Sul was the first state to officially adhere to the program. The “Gaucho” plan, released in late November, has already gathered over 100 change requests from production entities.

According to Fernando Henrique Sauter Groff, technical adviser for the Secretariat of Agriculture, Livestock, and Agribusiness of the State, Agro+ RS will help leverage agribusiness while rationalizing resources. “The plan will reduce response times to the sectors, facilitating coordination among official bodies to better channel investments,” stated Groff. The technical adviser also believes the project will promote direct and indirect gains for producers in the state by identifying production bottlenecks. “We will create a closer relationship between the State and producers, promoting more effective actions to improve productivity and product quality,” affirmed Groff. “Our focus is to simplify procedures without neglecting sanitary requirements.”

Akin to Southern producers, representatives in Tocantins state have also announced their adherence to the plan for cutting bureaucracy, simplifying and modernizing agribusiness.

According to Cavalcanti, adherence is taking place gradually. “Some states have already started setting up teams to introduce Agro+ in their regions. These states include Rondônia, Minas Gerais, Alagoas, Rio Grande do Norte, Santa Catarina, Paraná, and Mato Grosso,” said the head of the plan.